Time for an update on woman's will

Sunday

Apr 14, 2013 at 12:01 AM

DEAR BRUCE: My mother-in-law is in her 80s. She has a will that was redone by an attorney six years ago after my father-in-law died. Her assets are to be divided equally among her four children upon her death.

DEAR BRUCE: My mother-in-law is in her 80s. She has a will that was redone by an attorney six years ago after my father-in-law died. Her assets are to be divided equally among her four children upon her death.

Since the will was drawn up, her oldest (unmarried) son passed away, so his share would presumably go to his daughter. A few days ago, my mother-in-law informed us that she gave one of her other sons a tremendous amount of money ($40,000) to help him make a larger down payment on a house. She said, "You can deduct it from his inheritance after I'm gone."

She is on a fixed income and moderately comfortable, but even if all goes well during her last years, she will be lucky if she has $160,000 to divide four ways in the end. She despises attorneys and is not likely to revise her will again.

Is there any other way that her intent could be noted other than with a revision to the will? Could she write a letter to that effect and have the letter notarized? My husband is the designated executor to the will, if that makes any difference.

We have always been on good terms with my husband's siblings. I think she truly believes that we'll all just work it out, but I fear this is the sort of thing that might tear the family apart if not handled correctly.

D.Q., in Georgia

DEAR D.Q.: Your mother-in-law could not be more mistaken in her belief that you'll just work it out. The will should specifically say that so-and-so is not acknowledged as a primary recipient because of monies that had been advanced to him and other issues. Then, she can ask that the primary monies be divided three ways until such time as each person has received whatever amount she had advanced to the one sibling, and then the remainder could be split four ways.

The fact that she despises attorneys is absolute nonsense. If she wants to cause all kinds of problems with her family, just let things go the way they are. But if she has any love for her children, she will do as I have described with the services of a proper attorney.

Your fear that this could tear the family apart is completely valid. I hope she will listen to you and to me.

DEAR BRUCE: Back in 2006, I had a slip-and-fall accident at work. I went to a clinic to have it checked out the next day and after the diagnosis of a sprained ankle, I was given pain meds and a set of crutches and sent on my way. I returned to work the next day and gave the secretary the bills from the clinic. She told me that everything would be covered by the company, as it was work-related.

In ignorant bliss, I simply assumed that all would be taken care of, as the secretary indicated. Every time I received a new request for payment from the clinic, I simply forwarded it to my workplace. Recently, I procured a credit report and I saw that there was a judgment against me for the total of $2,000, granted to the clinic a few months after my visit. I contacted the clinic, asked if there was anything I could do and was told the debt was owned by a collections company and gave me the information.

I have been told by more than one person that to contact the collection agency this long after the fact would actually harm my credit as there would be an updated "event" regarding this situation. If I leave it alone, after so many years go by, the issue will drop from my credit history.

Bruce, could you please give me the real scoop? I do not know what to believe.

S.S., via email

DEAR S.S.: Ignoring it will not make it go away. The clinic has sold the bill to another agency, and it is now the company you have to deal with. Tell the agency that the money should have been paid by workers' comp as this is a comp-covered action, and that you notified your company in a timely fashion, so you expect them to make a claim against workers' comp.

If that doesn't get you anywhere, you might wish to go to the workers' comp company and explain the problem. Make it clear that under no circumstances are you going to pay for this because this was a work-related injury that should have been paid for by workers' compensation.

DEAR BRUCE: I am in my early 70s and have a few bucks that I would like to invest. Many of my friends have been suggesting that I invest in an annuity. They have invested in annuities and say it's the only way to go. I don't know much about them, so I'm looking to you for sage advice. Are there any that are insured and that have a hedge against inflation?

Reader, via email

DEAR READER: It's possible that an annuity is the way to go. I am not enthusiastic about annuities, but that is another issue.

If you have monies that you are willing to invest and leave for some period of time, an annuity may be the right choice. The reason I mentioned that is that most annuity investments are locked in for several years, and when you attempt to take the money out earlier, you will be severely penalized.

As to whether they are insured, some are. Hedging against inflation is another matter. You will have to do a good deal of research on the subject. There are so many new annuity products available that it's impossible to comment here on which one would be the appropriate, if any.

DEAR BRUCE: Which is a better way to start investing for my children, opening a Roth IRA or purchasing stock? My husband and I would like to provide for their future and not have them struggle like we did. I have heard so many good things about a Roth IRA that I think that would get a better return.

P.R., Iowa

DEAR P.R.: One thing you should understand is that you can open a Roth IRA only with money earned by the individual whose account it is in that tax year. If the children you are thinking about investing for are working, you might be able to work that out.

There are many other good ways to invest. In my opinion, one would be in the market, in a conservative dividend stock that was purchased on a regular basis, perhaps every quarter. If you feel that you can't make these selections yourself — and that's no crime — enlist the services of a broker and explain what you are trying to do. You will be establishing a long-term account, and you should be prepared to take a modest amount of risk. Without taking some risk, you are confining yourself to almost no return, and I think that's foolish.

DEAR BRUCE: I'm 73 years old. I own a duplex and I'm debating whether I should sell it or not. I need the income to supplement my Social Security. I can't live off just that income. The interest rates are so low right now.

Another problem is my only daughter moved 11 hours away from me. I need to scale back and am thinking that maybe I should live closer to her. I have no family here. I would appreciate your feedback.

Bonnie, via email

DEAR BONNIE: It's your call. If you want to stay where you are, that's your business. If you want to live closer to your daughter, I can understand that, too, but you should discuss it with her before you make any arrangements to do so.

By selling your duplex you will free up some money, which should take the pressure off. Depending on the amount, the relief may be for a short period of time, but that is another story.

The first thing to do is discuss it with your daughter. Determine if she would like for you to live closer, and decide if you want to. If you make the judgment to live closer to her and put your duplex up for sale, don't move until it is sold. It's much easier to sell a house that is occupied than one that is vacant.

DEAR BRUCE: My daughter has been renting a house for the past two years. She just found out that the house is going into foreclosure. Is there any way to find out what the time frame is going to be, so she knows when she needs to start looking for a new place to live?

She has been paying rent on time and faithfully every month, but apparently the landlord has not been using that money to pay the mortgage. She would like to stay there, but is not sure what her options are.

Nervous Mom, via email

DEAR NERVOUS MOM: The first thing I would do is contact the company that is holding the mortgage. She can learn this at the county seat where the mortgage has been recorded. Ask the mortgage company what its plans are in the foreclosure and to whom the rent should be paid.

In the event that the company doesn't respond, she should deposit the money in a separate account every month and immediately start looking for a new place to live. The mortgage company may very well be amenable to her staying there or it may suddenly decide it wants her out. If she finds a satisfactory new place, she should move.

If she has paid rent in advance (first and last), then I could write to the mortgage company and say she is withholding the last month's rent, which has been paid in advance to the current landlord. That would give you some expectation of not losing that money. I am not at all certain the company will stand still for it, but what do you have to lose?